EU Tax Observatory’s first report predicts amounts to be collected under a minimum tax

The European Commission on June 1 announced the launch of the European Tax Observatory, an independent, EU-financed research laboratory to study and advise EU policymakers on initiatives to tackle tax avoidance.

The Tax Observatory’s first report analyzes how much tax revenue the EU could collect by imposing a minimum tax on multinational companies.

The Tax Observatory, planned since June 2020, is composed of academics who are tasked with deepening research on tax avoidance, informing policymakers on the issues, and recommending policy actions. It is based at the Paris School of Economics and headed by French economist Gabriel Zucman. It was awarded an EU grant budget of EUR 1.2 million (USD 1.47 million) for its first year.

The Tax Observatory’s first report finds that, under an international agreement on a minimum corporate tax based on the initial US proposal of a 21% rate, the EU could collect an additional EUR 98 billion (USD 120 billion) in 2021. Under such an agreement, the largest revenue bumps in the EU would go to France (EUR 16 billion), Belgium (15.6 billion), and Ireland (11.3 billion).